Solo buyers need to team up to get into market, research shows

Even smaller units are close to impossible for most people to buy solo. This Randwick unit has a price guide of $900,000.

SYDNEY’S staggering property prices have created a growing gap in the wealth prospects of singles and couples.

A new study showed most couples on a dual income could still nab homes but rising prices have made it impossible for all but a handful of singles to get a foothold in the market.

Solo buyers now have to rely on the help of friends, family or even acquaintances to finance property deals, the Realestate.com.au commissioned Ipsos research showed.

The study revealed 63 per cent of Sydney residents surveyed couldn’t get into the market because they were buying solo.

This comes as Finder.com.au data showed solo buyers required an annual income of at least $90,000 to secure even the cheapest Sydney units within 30km of the CBD, priced at about $420,000.

This was if they wanted to avoid spending more than a third of their income on mortgage repayments and did not rent the homes out.

Solo buyers of the cheapest units 10km from the CBD at about $635,000 required an annual income of at least $130,000.

Even new apartments further from the CBD, such as these units in Botany, can be out of reach of many solo buyer budgets.

Demographer Mark McCrindle said rising buying costs would have a major impact on singles’ ability to secure wealth, considering property tended to be most people’s biggest assets.

“Buying a home in Sydney is hard enough on two incomes but for single people it’s just not realistic so they are being locked out of the biggest vehicle for wealth creation,” Mr McCrindle said.

Singles were also burdened with higher cost of living expenses than childless couples, which often made it harder for them to save deposits, he said.

“Singles don’t enjoy the same economies of scale as couples so their living expenses don’t come to half that of couples, it’s usually more,” Mr McCrindle said.

Homes in further flung areas are often a more realistic option for some buyers but living further out is not possible for all solo buyers.

“When singles can’t save deposits they are left out of the economic benefits of home ownership.”

Buyer’s advocate Cate Bakos said some solo buyers were adapting by partnering with friends, family and sometimes acquaintances in group purchases.

“First homebuyers who struggle with prices have the option of buying much further out of the CBD but for some people this isn’t ideal,” she said. “They (instead) enter co-ownership deals with people they trust. Usually siblings, best mates or just people with similar needs.

“The structure of these arrangements can be complicated. The ownership isn’t always split 50/50.”

High prices compelled property investor Claudia Parsons to join forces with her sister to purchase a two-bedroom unit in Bondi.

Claudia Parsons bought a Bondi unit with her sister.

The sisters had realised they would have been unable to afford the apartment on their own but teaming up would make it easier to get loan approval for a mortgage.

“Buying it on my own would have been too much of a drain on my cash each week, which I would have needed for other expenses,” Ms Parsons said.

“Teaming up with my sister was an obvious choice because we get on very well and we both had the same needs. We wanted the same property.”

The sisters split the deal 50/50 across everything, including the deposit and mortgage repayments. They also had an agreement drafted up to stipulate what would happen if one wanted to sell and the other didn’t.

“I don’t think this kind of agreement would have been so manageable with somebody else,” Ms Parsons said. “Teaming up with her just made every so easy.”

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